Sluggish sales and mounting inventories could force General Motors to offer significant discounts on its full-size pickups.
GM’s pickup truck supply reached 136 days at the end of July, well above the ideal sub-100 mark. Only seven months ago, GM had a 73-day supply of pickups. Rising inventories are due to slumping sales, as GM’s full-size trucks – the Chevrolet Silverado and GMC Sierra – recorded a drop of 11.5 percent in sales in July.
Analysts predict that GM will have to increase discounts to sell the vehicles. Last month, GM offered between $4,200 and $4,800 off its full-size trucks. It wasn’t enough though, as sales were down compared to the same month last year. Moreover, Ford and Chrysler offered even bigger incentives on their pickup trucks.
If GM starts offering even more serious discounts, it could start a pricing war with Ford and Chrysler. Either that, or General Motors starts cutting production. However, that would not be an option, as the automaker plans to shutdown its full-size truck plants for a combined 29 weeks to prepare for production of an all-new model. Therefore, it needs to have enough trucks in reserve.
GM is hoping to end August with 200,000 – 220,000 trucks in inventory. At the end of July, it had 238,165 trucks.